Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Amending Rules 900.3NY, Rule 961NY, Make a Conforming Change to Rule 935NY, and Eliminate Section 910-AEMI of the AEMI Rules, and Sections 910 and 910-AEMI of the NYSE MKT Company Guide, 9256-9258 [2017-02259]
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9256
Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices
amendment or repeal of any provision
of the NYSE Group Bylaws.26
The Commission believes that the
proposed changes to the NYSE Group
Bylaws are consistent with the
Exchange Act in that they are intended
to eliminate confusion that may result
from having outdated or obsolete
references and reflect the proposed new
ownership of NYSE National by the
NYSE Group.
III. Conclusion
It is therefore ordered, pursuant to
Section 19(b)(2) of the Act 27 that the
proposed rule changes (SR–NYSE–
2016–90; SR–NYSEArca–2016–167; and
SR–NYSEMKT–2016–122), as modified
by their respective Amendment No. 1,
be, and hereby are, approved.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.28
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–02262 Filed 2–2–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79895; File No. SR–
NYSEMKT–2017–03]
Self-Regulatory Organizations; NYSE
MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed
Rule Change Amending Rules
900.3NY, Rule 961NY, Make a
Conforming Change to Rule 935NY,
and Eliminate Section 910–AEMI of the
AEMI Rules, and Sections 910 and
910–AEMI of the NYSE MKT Company
Guide
January 30, 2017.
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934
(‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that on January
18, 2017, NYSE MKT LLC (‘‘Exchange’’
26 Article VII (Miscellaneous), Section 7.9(A)(b)
currently provides that, for so long as NYSE Group
controls, directly or indirectly, any of the
Exchanges, before any amendment or repeal of any
provision of the NYSE Group Bylaws shall be
effective, such amendment or repeal must either be
(i) filed with or filed with and approved by the
Commission under Section 19 of the Exchange Act
and the rules promulgated thereunder, or (ii)
submitted to the boards of directors of the NYSE,
NYSE Market, NYSE Regulation, NYSE Arca, NYSE
Arca Equities, and NYSE Alternext US LLC or the
boards of directors of their successors, in each case
only to the extent that such entity continues to be
controlled directly or indirectly by NYSE Group.
27 15 U.S.C. 78f(b)(2).
28 17 CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
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17:26 Feb 02, 2017
Jkt 241001
or ‘‘NYSE MKT’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II, and
III below, which Items have been
prepared by the self-regulatory
organization. The Commission is
publishing this notice to solicit
comments on the proposed rule change
from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to amend
Rule 900.3NY to eliminate Price
Improving Orders and Quotes, amend
Rule 961NY to eliminate the electronic
and open outcry bidding and offering
requirements associated with a Price
Improving Order or Quote, and make a
conforming change to Rule 935NY, and
(2) eliminate Section 910–AEMI of the
AEMI Rules, and Sections 910 and 910–
AEMI of the NYSE MKT Company
Guide. The proposed rule change is
available on the Exchange’s Web site at
www.nyse.com, at the principal office of
the Exchange, and at the Commission’s
Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of,
and basis for, the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of those statements may be examined at
the places specified in Item IV below.
The Exchange has prepared summaries,
set forth in sections A, B, and C below,
of the most significant parts of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule
Change
1. Purpose
The Exchange proposes to (1) amend
Rule 900.3NY to eliminate Price
Improving Orders and Quotes, amend
Rule 961NY to eliminate the electronic
and open outcry bidding and offering
requirements associated with a Price
Improving Order or Quote, and make a
conforming change to Rule 935NY, and
(2) eliminate Section 910–AEMI of the
AEMI Rules, and Sections 910 and 910–
AEMI of the NYSE MKT Company
Guide. The Exchange proposes to
eliminate these order types in order to
streamline its rules and reduce
complexity among its order type
PO 00000
Frm 00066
Fmt 4703
Sfmt 4703
offerings, and to delete obsolete and
outdated rules.4
Elimination of Price Improving Orders
and Quotes
The Exchange proposes to eliminate,
and thus delete from its rules, Price
Improving Orders and Quotes, as
defined in Rule 900.3NY(r).
A Price Improving Order or Price
Improving Quote is an order or quote to
buy or sell an option at a specified price
at an increment smaller than the
minimum price variation in the
security. Price Improving Orders and
Quotes may be entered in increments as
small as one cent. Because the Exchange
has not implemented this functionality,
the Exchange believes it is appropriate
to delete the functionality from its
rules.5
To reflect this elimination, the
Exchange proposes to delete all
references to Price Improving Orders
and Quotes in Rule 900.3NY(r), and to
the electronic and open outcry bidding
and offering requirements associated
with a Price Improving Order or Quote
in the second introductory paragraph of
Rule 961NY and in Rules 961NY(a),
961NY(b) and 961NY(c), and to delete
in the Commentary to Rule 935NY a
reference to Rule 900.3NY(r),6 as
follows:
• Delete Rule 900.3NY(r), which
defines Price Improving Orders and
Quotes;
• delete the second introductory
paragraph of Rule 961NY, which
describes which options may be
4 See e.g., Mary Jo White, Chair, Securities and
Exchange Commission, Speech at the Sandler
O’Neill & Partners, L.P. Global Exchange and
Brokerage Conference (June 5, 2014) (available at
www.sec.gov/News/Speech/Detail/Speech/
1370542004312#.U5HI-fmwJiw) (‘‘I am asking the
exchanges to conduct a comprehensive review of
their order types and how they operate in practice.
As part of this review, I expect that the exchanges
will consider appropriate rule changes to help
clarify the nature of their order types and how they
interact with each other, and how they support fair,
orderly, and efficient markets.’’ Id.).
5 Though originally adopted as a competitive
response to another options market introducing
price improving orders, the Exchange never
implemented this functionality for a variety of
reasons, including technology and because most
options volume was concentrated in Penny Pilot
issues where price improving orders would be of
little or no value.
6 See Securities Exchange Act Release No. 59472
(February 27, 2009), 74 FR 9843 (March 6, 2009)
(SR–NYSEALTR–2008–14) (order granting
accelerated approval of proposed rule change
establishing rules for the trading of listed options
including order exposure requirements in
connection with Price Improving Orders and
Quotes, designation of options eligible for Penny
Price Improvement, the manner of bidding or
offering in open outcry for Penny Pricing, and the
required ‘‘sweep’’ of any Penny Pricing interest in
the System).
E:\FR\FM\03FEN1.SGM
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Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices
designated for penny price
improvement; 7
• delete Rule 961NY(a), which
describes the electronic submission
process in connection with a Price
Improving Order or Quote; 8
• delete Rule 961NY(b), which
describes the open outcry submission
process in connection with a Price
Improving Order or Quote; 9
• delete Rule 961NY(c), which
describes the requirement to
electronically ‘‘sweep’’ any penny
pricing interest in the Exchange’s
System; 10 and
• delete in the Commentary to Rule
935NY a reference to Rule 900.3NY(r).
Elimination of Obsolete and Out Dated
Section 910–AEMI of the AEMI Rules
and Sections 910 and 910–AEMI of the
NYSE MKT Company Guide
asabaliauskas on DSK3SPTVN1PROD with NOTICES
The Exchange also proposes to
eliminate, and thus delete one section
from its rulebook and two sections from
the Company Guide, governing the same
topic, that are now obsolete and
outdated:
• Delete Section 910–AEMI. Amex
Company Guide RELATIONSHIP WITH
SPECIALIST (§ 910–AEMI)
PROCEDURES, RULES AND
REGULATIONS, of the AEMI Rules;
• delete Section 910. PROCEDURES,
RULES AND REGULATIONS, of the
NYSE MKT Company Guide; and
• delete Section 910–AEMI.
PROCEDURES, RULES AND
REGULATIONS, of the NYSE MKT
Company Guide.
The Exchange has identified these
obsolete and outdated rules and
proposes to delete both the section in
the rulebook and the corresponding
sections in the Company Guide. These
rules relate to trading systems that have
been decommissioned by the Exchange
and rules governing Specialists’
obligations, conduct, and activities,
including dealings and
communications, which were
superseded by later-implemented rules
governing the same conduct or
circumstances. The Commission has
previously approved the Exchange’s
new Equity Rules that superseded the
AEMI rules.11 Specifically, pursuant to
Rule 0(b) and Rule 0—Equities, the
Equities Rules govern all transactions
7 See
id.
id.
9 See id.
10 See id.
11 See Securities Exchange Act Release No. 58705
(October 1, 2008), 73 FR 58995 (October 8, 2008)
(SR–Amex–2008–63) (order approving proposed
rule change to establish new membership, member
firm conduct, and equity trading rules following the
acquisition of the Exchange).
8 See
VerDate Sep<11>2014
17:26 Feb 02, 2017
Jkt 241001
conducted on the Exchange’s Equities
Trading Systems.
2. Statutory Basis
The proposed rule change is
consistent with Section 6(b) 12 of the
Act, in general, and furthers the
objectives of Section 6(b)(5),13 in
particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, and to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system.
Specifically, the Exchange believes
that eliminating Price Improving Orders
and Quotes would remove impediments
to and perfect a national market system
by simplifying the functionality and
complexity of its order types. The
Exchange believes that eliminating these
order types would be consistent with
the public interest and the protection of
investors because investors will not be
harmed and in fact would benefit from
the removal of complex functionality.
The Exchange also believes that
eliminating Price Improving Orders and
Quotes would benefit investors and add
transparency and clarity to the
Exchange’s rules because the
functionality of those order types was
not implemented and therefore is not
available.
The Exchange further believes that
deleting corresponding references in
Exchange rules to deleted order types,
and the associated bidding and offering
process in connection with a deleted
order type, also removes impediments
to and perfects the mechanism of a free
and open market by ensuring that
members, regulators and the public can
more easily navigate the Exchange’s
rulebook and better understand the
order types available for trading on the
Exchange. Removing obsolete cross
references also furthers the goal of
transparency and adds clarity to the
Exchange’s rules.
The Exchange further believes that by
deleting obsolete and outdated rules, it
also promotes just and equitable
principles of trade, removes
impediments to and perfects the
mechanism of a free and open market
and a national market system, and, in
general, helps to protect investors and
the public interest by providing
transparency as to which rules are
operable and reducing potential
confusion that may result from having
obsolete or outdated rules in the
Exchange’s rulebook. The Exchange
further believes that the proposal
removes impediments to and perfects
the mechanism of a free and open
market by ensuring that members,
regulators and the public can more
easily navigate and understand the
Exchange’s rulebook.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposed rule change will impose
any burden on competition that is not
necessary or appropriate in furtherance
of the purposes of the Act. The
proposed change is not designed to
address any competitive issue but
would rather remove complex
functionality, references to functionality
that is not available, and obsolete and
outdated rules, thereby reducing
confusion and making the Exchange’s
rules easier to understand and navigate.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed
rule change pursuant to Section
19(b)(3)(A)(iii) of the Act 14 and Rule
19b–4(f)(6) thereunder.15 Because the
proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
prior to 30 days from the date on which
it was filed, or such shorter time as the
Commission may designate, if
consistent with the protection of
investors and the public interest, the
proposed rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act and Rule 19b–4(f)(6)(iii)
thereunder.
A proposed rule change filed under
Rule 19b–4(f)(6) 16 normally does not
become operative prior to 30 days after
the date of the filing. However, pursuant
to Rule 19b4(f)(6)(iii),17 the Commission
may designate a shorter time if such
action is consistent with the protection
of investors and the public interest.
At any time within 60 days of the
filing of such proposed rule change, the
14 15
U.S.C. 78s(b)(3)(A)(iii).
CFR 240.19b–4(f)(6).
16 17 CFR 240.19b–4(f)(6).
17 17 CFR 240.19b–4(f)(6)(iii).
15 17
12 15
13 15
PO 00000
U.S.C. 78f(b).
U.S.C. 78f(b)(5).
Frm 00067
Fmt 4703
Sfmt 4703
9257
E:\FR\FM\03FEN1.SGM
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9258
Federal Register / Vol. 82, No. 22 / Friday, February 3, 2017 / Notices
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 18 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
asabaliauskas on DSK3SPTVN1PROD with NOTICES
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSEMKT–2017–03 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSEMKT–2017–03. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
18 15
U.S.C. 78s(b)(2)(B).
VerDate Sep<11>2014
17:26 Feb 02, 2017
Jkt 241001
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NYSEMKT–2017–03 and should be
submitted on or before February 24,
2017.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.19
Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017–02259 Filed 2–2–17; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–79902; File No. SR–NSX–
2016–16]
Self-Regulatory Organizations;
National Stock Exchange, Inc.; Order
Approving Proposed Rule Change, as
Modified by Amendment No. 1, in
Connection With a Proposed
Acquisition of the Exchange by NYSE
Group, Inc.
January 30, 2017.
I. Introduction
On December 22, 2016, National
Stock Exchange, Inc. (‘‘NSX’’ or the
‘‘Exchange’’) filed with the Securities
and Exchange Commission
(‘‘Commission’’), pursuant to Section
19(b)(1) 1 of the Securities Exchange Act
of 1934 (‘‘Act’’),2 and Rule 19b–4
thereunder,3 a proposed rule change to
make certain amendments to its
corporate governance documents and
rules, and the corporate governance
documents of NYSE Group, Inc. (‘‘NYSE
Group’’), NYSE Holdings LLC (‘‘NYSE
Holdings’’), Intercontinental Exchange
Holdings, Inc. (‘‘ICE Holdings’’), and
Intercontinental Exchange, Inc. (‘‘ICE’’)
in order to effectuate a proposed
transaction (the ‘‘Transaction’’) in
which the Exchange will become a
wholly-owned subsidiary of NYSE
Group. The proposed rule change was
published for comment in the Federal
Register on December 30, 2016.4 On
January 23, 2017, the Exchange
submitted Amendment No. 1 to the
proposed rule change.5 The Commission
19 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 See Securities Exchange Act Release No. 79684
(December 23, 2016), 81 FR 96552 (SR–NSX–2016–
16) (‘‘Notice’’).
5 In Amendment No. 1, the Exchange corrected a
technical error in the proposed Seventh Amended
1 15
PO 00000
Frm 00068
Fmt 4703
Sfmt 4703
received no comments on the proposal.
This order approves the proposal, as
modified by Amendment No. 1.
II. Description of the Proposal
On December 14, 2016, ICE entered
into an agreement with the Exchange
pursuant to which its wholly-owned
subsidiary, NYSE Group, will acquire
all of the outstanding capital stock of
the Exchange (the ‘‘Acquisition’’). As a
result of the Acquisition, the Exchange
will be renamed NYSE National, Inc.
(‘‘NYSE National’’) and will be operated
as a wholly-owned subsidiary of NYSE
Group. NYSE Group is a wholly-owned
subsidiary of NYSE Holdings, which is
in turn 100% owned by ICE Holdings.
ICE is a public company listed on the
New York Stock Exchange LLC (the
‘‘NYSE’’), and owns 100% of ICE
Holdings.6 Following the Acquisition,
the Exchange will continue to be
registered as a national securities
exchange.7 According to the Exchange,
as it does today, the Exchange will
continue to have separate rules,
membership rosters, and listings that
will be distinct from the rules,
membership rosters, and listings of the
three other registered national securities
exchanges owned by NYSE Group,
namely, the NYSE, NYSE MKT LLC
(‘‘NYSE MKT’’), and NYSE Arca, Inc.
(‘‘NYSE Arca’’) (together, the ‘‘NYSE
Exchanges’’).8
In connection with the Acquisition,
the Exchange proposes to amend its
Certificate of Incorporation and Third
Amended and Restated Bylaws. In
addition, the Exchange proposes to
amend certain corporate governance
documents of NYSE Group, NYSE
Holdings, ICE Holdings and ICE,9 such
that the conditions in those documents
are equally applicable to the NYSE
NSX.10 According to the Exchange, the
and Restated Bylaws of ICE. Specifically, the
Exchange replaced a reference in Section 12.1(a)(1)
of Article XII of the ICE Bylaws to ‘‘the Amended
and Restated Certificate of Incorporation of the
Corporation’’ with a reference to ‘‘these bylaws.’’
Amendment No. 1 was technical in nature and
therefore does not need to be published for
comment.
6 See Notice, supra note 4, at 96552.
7 See id.
8 See id.
9 The NYSE Exchanges filed proposed rule
changes, which propose similar amendments to
their respective governance documents. See
Securities Exchange Act Release Nos. 79671
(December 22, 2016), 81 FR 96128 (SR–NYSE–
2016–90); 79678 (December 22, 2016), 81 FR 96102
(May 16, 2016) (SR–NYSEArca–2016–167); and
79675 (December 22, 2016), 81 FR 96128 (May 16,
2016) (SR–NYSEMKT–2016–122).
10 See Securities Exchange Act Release No. 70210
(August 15, 2013), 78 FR 51758 (August 21, 2013)
(approving rule changes related to NYSE Euronext
becoming a wholly owned subsidiary of ICE (then
called IntercontinentalExchange Group, Inc.)).
E:\FR\FM\03FEN1.SGM
03FEN1
]]>Agencies
[Federal Register Volume 82, Number 22 (Friday, February 3, 2017)]
[Notices]
[Pages 9256-9258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-02259]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-79895; File No. SR-NYSEMKT-2017-03]
Self-Regulatory Organizations; NYSE MKT LLC; Notice of Filing and
Immediate Effectiveness of Proposed Rule Change Amending Rules 900.3NY,
Rule 961NY, Make a Conforming Change to Rule 935NY, and Eliminate
Section 910-AEMI of the AEMI Rules, and Sections 910 and 910-AEMI of
the NYSE MKT Company Guide
January 30, 2017.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby given
that on January 18, 2017, NYSE MKT LLC (``Exchange'' or ``NYSE MKT'')
filed with the Securities and Exchange Commission (``Commission'') the
proposed rule change as described in Items I, II, and III below, which
Items have been prepared by the self-regulatory organization. The
Commission is publishing this notice to solicit comments on the
proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
The Exchange proposes to amend Rule 900.3NY to eliminate Price
Improving Orders and Quotes, amend Rule 961NY to eliminate the
electronic and open outcry bidding and offering requirements associated
with a Price Improving Order or Quote, and make a conforming change to
Rule 935NY, and (2) eliminate Section 910-AEMI of the AEMI Rules, and
Sections 910 and 910-AEMI of the NYSE MKT Company Guide. The proposed
rule change is available on the Exchange's Web site at www.nyse.com, at
the principal office of the Exchange, and at the Commission's Public
Reference Room.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of, and basis for, the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of those statements may be examined at
the places specified in Item IV below. The Exchange has prepared
summaries, set forth in sections A, B, and C below, of the most
significant parts of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and the
Statutory Basis for, the Proposed Rule Change
1. Purpose
The Exchange proposes to (1) amend Rule 900.3NY to eliminate Price
Improving Orders and Quotes, amend Rule 961NY to eliminate the
electronic and open outcry bidding and offering requirements associated
with a Price Improving Order or Quote, and make a conforming change to
Rule 935NY, and (2) eliminate Section 910-AEMI of the AEMI Rules, and
Sections 910 and 910-AEMI of the NYSE MKT Company Guide. The Exchange
proposes to eliminate these order types in order to streamline its
rules and reduce complexity among its order type offerings, and to
delete obsolete and outdated rules.\4\
---------------------------------------------------------------------------
\4\ See e.g., Mary Jo White, Chair, Securities and Exchange
Commission, Speech at the Sandler O'Neill & Partners, L.P. Global
Exchange and Brokerage Conference (June 5, 2014) (available at
www.sec.gov/News/Speech/Detail/Speech/1370542004312#.U5HI-fmwJiw)
(``I am asking the exchanges to conduct a comprehensive review of
their order types and how they operate in practice. As part of this
review, I expect that the exchanges will consider appropriate rule
changes to help clarify the nature of their order types and how they
interact with each other, and how they support fair, orderly, and
efficient markets.'' Id.).
---------------------------------------------------------------------------
Elimination of Price Improving Orders and Quotes
The Exchange proposes to eliminate, and thus delete from its rules,
Price Improving Orders and Quotes, as defined in Rule 900.3NY(r).
A Price Improving Order or Price Improving Quote is an order or
quote to buy or sell an option at a specified price at an increment
smaller than the minimum price variation in the security. Price
Improving Orders and Quotes may be entered in increments as small as
one cent. Because the Exchange has not implemented this functionality,
the Exchange believes it is appropriate to delete the functionality
from its rules.\5\
---------------------------------------------------------------------------
\5\ Though originally adopted as a competitive response to
another options market introducing price improving orders, the
Exchange never implemented this functionality for a variety of
reasons, including technology and because most options volume was
concentrated in Penny Pilot issues where price improving orders
would be of little or no value.
---------------------------------------------------------------------------
To reflect this elimination, the Exchange proposes to delete all
references to Price Improving Orders and Quotes in Rule 900.3NY(r), and
to the electronic and open outcry bidding and offering requirements
associated with a Price Improving Order or Quote in the second
introductory paragraph of Rule 961NY and in Rules 961NY(a), 961NY(b)
and 961NY(c), and to delete in the Commentary to Rule 935NY a reference
to Rule 900.3NY(r),\6\ as follows:
---------------------------------------------------------------------------
\6\ See Securities Exchange Act Release No. 59472 (February 27,
2009), 74 FR 9843 (March 6, 2009) (SR-NYSEALTR-2008-14) (order
granting accelerated approval of proposed rule change establishing
rules for the trading of listed options including order exposure
requirements in connection with Price Improving Orders and Quotes,
designation of options eligible for Penny Price Improvement, the
manner of bidding or offering in open outcry for Penny Pricing, and
the required ``sweep'' of any Penny Pricing interest in the System).
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Delete Rule 900.3NY(r), which defines Price Improving
Orders and Quotes;
delete the second introductory paragraph of Rule 961NY,
which describes which options may be
[[Page 9257]]
designated for penny price improvement; \7\
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\7\ See id.
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delete Rule 961NY(a), which describes the electronic
submission process in connection with a Price Improving Order or Quote;
\8\
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\8\ See id.
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delete Rule 961NY(b), which describes the open outcry
submission process in connection with a Price Improving Order or Quote;
\9\
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\9\ See id.
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delete Rule 961NY(c), which describes the requirement to
electronically ``sweep'' any penny pricing interest in the Exchange's
System; \10\ and
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\10\ See id.
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delete in the Commentary to Rule 935NY a reference to Rule
900.3NY(r).
Elimination of Obsolete and Out Dated Section 910-AEMI of the AEMI
Rules and Sections 910 and 910-AEMI of the NYSE MKT Company Guide
The Exchange also proposes to eliminate, and thus delete one
section from its rulebook and two sections from the Company Guide,
governing the same topic, that are now obsolete and outdated:
Delete Section 910-AEMI. Amex Company Guide RELATIONSHIP
WITH SPECIALIST (Sec. 910-AEMI) PROCEDURES, RULES AND REGULATIONS, of
the AEMI Rules;
delete Section 910. PROCEDURES, RULES AND REGULATIONS, of
the NYSE MKT Company Guide; and
delete Section 910-AEMI. PROCEDURES, RULES AND
REGULATIONS, of the NYSE MKT Company Guide.
The Exchange has identified these obsolete and outdated rules and
proposes to delete both the section in the rulebook and the
corresponding sections in the Company Guide. These rules relate to
trading systems that have been decommissioned by the Exchange and rules
governing Specialists' obligations, conduct, and activities, including
dealings and communications, which were superseded by later-implemented
rules governing the same conduct or circumstances. The Commission has
previously approved the Exchange's new Equity Rules that superseded the
AEMI rules.\11\ Specifically, pursuant to Rule 0(b) and Rule 0--
Equities, the Equities Rules govern all transactions conducted on the
Exchange's Equities Trading Systems.
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\11\ See Securities Exchange Act Release No. 58705 (October 1,
2008), 73 FR 58995 (October 8, 2008) (SR-Amex-2008-63) (order
approving proposed rule change to establish new membership, member
firm conduct, and equity trading rules following the acquisition of
the Exchange).
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2. Statutory Basis
The proposed rule change is consistent with Section 6(b) \12\ of
the Act, in general, and furthers the objectives of Section
6(b)(5),\13\ in particular, in that it is designed to prevent
fraudulent and manipulative acts and practices, to promote just and
equitable principles of trade, to foster cooperation and coordination
with persons engaged in facilitating transactions in securities, and to
remove impediments to and perfect the mechanism of a free and open
market and a national market system.
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\12\ 15 U.S.C. 78f(b).
\13\ 15 U.S.C. 78f(b)(5).
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Specifically, the Exchange believes that eliminating Price
Improving Orders and Quotes would remove impediments to and perfect a
national market system by simplifying the functionality and complexity
of its order types. The Exchange believes that eliminating these order
types would be consistent with the public interest and the protection
of investors because investors will not be harmed and in fact would
benefit from the removal of complex functionality. The Exchange also
believes that eliminating Price Improving Orders and Quotes would
benefit investors and add transparency and clarity to the Exchange's
rules because the functionality of those order types was not
implemented and therefore is not available.
The Exchange further believes that deleting corresponding
references in Exchange rules to deleted order types, and the associated
bidding and offering process in connection with a deleted order type,
also removes impediments to and perfects the mechanism of a free and
open market by ensuring that members, regulators and the public can
more easily navigate the Exchange's rulebook and better understand the
order types available for trading on the Exchange. Removing obsolete
cross references also furthers the goal of transparency and adds
clarity to the Exchange's rules.
The Exchange further believes that by deleting obsolete and
outdated rules, it also promotes just and equitable principles of
trade, removes impediments to and perfects the mechanism of a free and
open market and a national market system, and, in general, helps to
protect investors and the public interest by providing transparency as
to which rules are operable and reducing potential confusion that may
result from having obsolete or outdated rules in the Exchange's
rulebook. The Exchange further believes that the proposal removes
impediments to and perfects the mechanism of a free and open market by
ensuring that members, regulators and the public can more easily
navigate and understand the Exchange's rulebook.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposed rule change will
impose any burden on competition that is not necessary or appropriate
in furtherance of the purposes of the Act. The proposed change is not
designed to address any competitive issue but would rather remove
complex functionality, references to functionality that is not
available, and obsolete and outdated rules, thereby reducing confusion
and making the Exchange's rules easier to understand and navigate.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
No written comments were solicited or received with respect to the
proposed rule change.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has filed the proposed rule change pursuant to Section
19(b)(3)(A)(iii) of the Act \14\ and Rule 19b-4(f)(6) thereunder.\15\
Because the proposed rule change does not: (i) Significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6)(iii) thereunder.
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\14\ 15 U.S.C. 78s(b)(3)(A)(iii).
\15\ 17 CFR 240.19b-4(f)(6).
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A proposed rule change filed under Rule 19b-4(f)(6) \16\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b4(f)(6)(iii),\17\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest.
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\16\ 17 CFR 240.19b-4(f)(6).
\17\ 17 CFR 240.19b-4(f)(6)(iii).
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At any time within 60 days of the filing of such proposed rule
change, the
[[Page 9258]]
Commission summarily may temporarily suspend such rule change if it
appears to the Commission that such action is necessary or appropriate
in the public interest, for the protection of investors, or otherwise
in furtherance of the purposes of the Act. If the Commission takes such
action, the Commission shall institute proceedings under Section
19(b)(2)(B) \18\ of the Act to determine whether the proposed rule
change should be approved or disapproved.
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\18\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to rule-comments@sec.gov. Please include
File Number SR-NYSEMKT-2017-03 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
All submissions should refer to File Number SR-NYSEMKT-2017-03. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 552, will be available for Web site viewing and
printing in the Commission's Public Reference Room, 100 F Street NE.,
Washington, DC 20549 on official business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the filing also will be available
for inspection and copying at the principal office of the Exchange. All
comments received will be posted without change; the Commission does
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly. All
submissions should refer to File Number SR-NYSEMKT-2017-03 and should
be submitted on or before February 24, 2017.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\19\
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\19\ 17 CFR 200.30-3(a)(12).
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Eduardo A. Aleman,
Assistant Secretary.
[FR Doc. 2017-02259 Filed 2-2-17; 8:45 am]
BILLING CODE 8011-01-P
